China Makes Large Purchase of U.S. Wheat

The wheat industry was energetic late last week on the news that Chinese buyers purchases 340,000 metric tons, or 12.5 million bushels of U.S. hard red winter wheat. The purchase is scheduled for delivery during the 2020-2021 marketing year. This represents the largest purchase by China since the country implemented retaliatory tariffs against U.S. wheat in March 2018.

Friday’s announcement was welcomed news as the globe continues to deal with the growing pandemic of coronavirus.

“NAWG also hopes that this is just one of several steps towards implementation of Phase I of the new U.S.-China trade deal,” said National Association of Wheat Growers President Dave Milligan.  “China is one of the largest buyers of U.S. wheat, and we hope that the new U.S.-China trade deal will restore the export opportunity that was building in China for American wheat farmers.”

“This purchase falls under China’s 9.64 million metric ton tariff rate quota (TRQ). China has agreed to work toward filling its TRQ for wheat imports,” noted U.S. Wheat Associates President Vince Peterson.  “As USW has noted, if the changes are in fact implemented, and Chinese millers can respond to market signals, most of the TRQ should be used. U.S. wheat farmers are in a good position to help fill the TRQ given current export prices, relatively low freight rates and the ready supply of the wheat classes China needs.

“USW appreciates the efforts of both the U.S. and Chinese governments to reach the Phase One trade agreement that has helped re-open the door to U.S. wheat imports by China,” Peterson continued.  “We believe that China’s flour millers and growing baking industry want the opportunity to purchase high-quality U.S. wheat classes again and we hope this is only the beginning of a new, more productive trade relationship.” 

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